S-Corporation

Description

What Is an S Corporation (S Corp)?

An S corp or S corporation is a business structure that is permitted under the tax code to pass its taxable income, credits, deductions, and losses directly to its shareholders. That gives it certain advantages over the more common C corp, The S corp is available only to small businesses with 100 or fewer shareholders, and is an alternative to the limited liability company (LLC).

Both S corps and LLCs are known as “pass-through entities” because they pay no corporate taxes but instead pay their shareholders, who are responsible for the taxes due.